Jason Barton

Professional Information and Energy News

Archive for the ‘The Economist’ tag

The emerging world, long a source of cheap labour, now rivals the rich countries for business innovation

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These trends are also extremely important to apply to energy markets. In terms of energy and resources, it’s much more efficient to transfer technology than to transport physical resources such as petroleum or coal. In the past, we could have assumed the technology would come from the U.S. and Europe. Now China is ahead of the U.S. in clean energy technology, and Brazil is not far behind, in terms of biofuels and other areas as well.

IN 1980 American car executives were so shaken to find that Japan had replaced the United States as the world’s leading carmaker that they began to visit Japan to find out what was going on. How could the Japanese beat the Americans on both price and reliability? And how did they manage to produce new models so quickly? The visitors discovered that the answer was not industrial policy or state subsidies, as they had expected, but business innovation. The Japanese had invented a new system of making things that was quickly dubbed “lean manufacturing”.

Read the entire article here.

Written by Jason

April 17th, 2010 at 8:42 am

Cap-and-trade’s last hurrah

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The decline of a once wildly popular idea

Mar 18th 2010 | From The Economist print edition

Gaia lent an unhelpful hand

IN THE 1990s cap-and-trade—the idea of reducing carbon-dioxide emissions by auctioning off a set number of pollution permits, which could then be traded in a market—was the darling of the green policy circuit. A similar approach to sulphur dioxide emissions, introduced under the 1990 Clean Air Act, was credited with having helped solve acid-rain problems quickly and cheaply. And its great advantage was that it hardly looked like a tax at all, though it would bring in a lot of money.

[…]

Energy bills have in the past garnered bipartisan support, and this one also needs to. That is why Senator Graham matters. He could bring on board both Democrats and Republicans. Mr Graham’s contribution has been to focus the rhetoric not just on near-term jobs, but also on longer-term competitiveness. Every day America does not have climate legislation, he argues, is a day that China’s grip on the global green economy gets tighter.

Read the entire article here.

Fmr. CEO of BP, John Browne’s memoirs

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This short article is an interesting read about what looks like a very interesting, much longer read. Having worked at BP’s Energy Biosciences Institute, I’ve been intrigued by what I’ve learned about the company. His comment that corporate social responsibility “is not just political correctness, but a means to safeguard investments for the long term,” presents what I see to be an effective level, one with which I once might have found fault, but am now much more prone to pull. I’ll have to find this book.

Mar 4th 2010 | From The Economist print edition

Beyond Business. By John Browne. Weidenfeld & Nicolson; 310 pages; £20. Buy from Amazon.co.uk

DURING his 12 years as boss of BP, John Browne was the master of many complicated briefs. He launched three big takeovers, sparking a wave of consolidation that reshaped the industry; to the horror of his peers, he admitted that oil firms had a part to play in the fight against global warming; he invested in Russia’s lucrative but lawless oil business with much greater success than other Western oil firms—and he made pots of money for BP’s shareholders, year after year.

Read the entire article here.

The success of genetically modified crops provides opportunities to win over their critics

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Many years of activist friends decrying the evils of GM food has led to a knee-jerk reaction on my part, resisting these Frankenfoods. But then, a few more years of working with some of the scientists who perform these genetic modifications has made me wonder. When I ask these scientists, people who ride their bikes to work and drink organic, free-trade coffee out of their reusable mugs, what they think of these protesters, they are thoughtful, considerate, and often come back to a similar response: ‘I don’t think these people really understand what they’re protesting.’

To me, that’s part of the reason for the protests. If we don’t understand it, maybe we shouldn’t be growing and then eating it. But these scientists claim that they do understand, and that it’s mostly very safe, and has vast potential for societal benefits. And people have been performing hybridization on plants and animals, creating stronger plow horses and better tasting sweet corn, for thousands of years. Still, there’s something fishy about crossing a strain of corn with a squid (pun regrettably intended).

As usual, this article from the Economist provides some excellent food for thought (yeah, another one). They are also attentive to the issue of poorer farmers. Since GM seeds are both more expensive, and produce more lucrative yields, the general belief is that the market is trending away from participation of smaller producers, and more towards industrialization and monopolization by large agri-businesses.

This is also, of course, central to biofuels, as the ability to ferment diverse, five and six carbon sugars into ethanol and other usable forms of energy, unlike the very easy to ferment glucose found in corn kernels and sugarcane, will likely rely on genetic modification of crops such as switchgrass, miscanthus, and even algae.

Indeed, it is a fascinating time to be alive, if even the focus is not always uniformly positive.

Genetically modified food

Attack of the really quite likeable tomatoes

Feb 25th 2010 | From The Economist print edition

IN THE 14 years since the first genetically modified crops were planted commercially, their descendants, relatives and remixes have gone forth and multiplied like profitable, high-tech pondweed. A new report (see article) shows that 25 countries now grow GM crops, with the total area under cultivation now larger than Peru. Three-quarters of the farmland used to grow soya is now sown with a genetically modified variant, and the figures for cotton are not that far behind, thanks to its success in India. China recently gave the safety go-ahead to its first GM rice variety and a new GM maize that should make better pig feed. More and more plants are having their genomes sequenced: a full sequence for maize was published late last year, the soya genome in January. Techniques for altering genomes are moving ahead almost as fast as the genomes themselves are stacking up, and new crops with more than one added trait are coming to market.

Read the entire article here.

Written by Jason

February 25th, 2010 at 9:16 pm

The data deluge

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So much information, so little time or desire to process it. This is a bit of a departure from the usual subject matter on this site, but I found it interesting enough to post. When we were talking about issues of identity theft and information security, a buddy recently said that, as a blogger, I’m more vulnerable than most. It offended me, first because I don’t consider myself a blogger, and second because I don’t like to think of myself as a blogger.

Anyway, here’s the article…

Businesses, governments and society are only starting to tap its vast potential

Feb 25th 2010 | From The Economist print edition

EIGHTEEN months ago, Li & Fung, a firm that manages supply chains for retailers, saw 100 gigabytes of information flow through its network each day. Now the amount has increased tenfold. During 2009, American drone aircraft flying over Iraq and Afghanistan sent back around 24 years’ worth of video footage. New models being deployed this year will produce ten times as many data streams as their predecessors, and those in 2011 will produce 30 times as many.

Read the entire article here.

Written by Jason

February 25th, 2010 at 8:52 pm

Rising Angola

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Energy is at the heart of Angola’s situation. Oil is providing a huge boon to their economy, and now the fruits of this growth are being enjoyed by a wider proportion of the population.The investments China is making in Angola are also interesting to note as China sets the stage so that it may become the world’s next superpower.

Oil, glorious oil

The country’s breakneck growth is slowly benefiting the masses

Jan 28th 2010 | LUANDA | From The Economist print edition

AFP

TWO years ago, oil-rich Angola was reckoned to have one of the world’s fastest-growing economies. In both 2006 and 2007 real GDP had surged by around 20%, and double-digit growth rates were widely predicted for at least the next five years. Then oil prices crashed with the global recession. Last year the economy is estimated to have grown, at best, by 1.5%. But it is bouncing back. Some say Angola will be among the world’s top five performers again this year, with growth exceeding 8%.

After four decades of strife, Angola was a basket case. A 14-year war of independence against its former Portuguese masters until 1975 had been followed by nearly three decades of fighting between the communist Popular Movement for the Liberation of Angola (MPLA) and Jonas Savimbi’s pro-Western National Union for the Total Independence of Angola (UNITA) that ended in 2002. Out of a population of 7m in 1980, some 1.5m were killed and more than 4m forced to flee their homes. A whole generation had missed their education. Infrastructure, political institutions and social services had to be rebuilt, often from scratch.

Read the entire article here.

Written by Jason

February 1st, 2010 at 3:55 pm

Big government: Stop!

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Are the measures discussed in these articles just more cases of big government expansion, or are they wise efforts to create a more efficient economy? There’s a theme in today’s posts, looking at the expansion of government, particularly in the energy sector, asking whether or not it is prudent intervention. Clearly the U.S. government has been expanding since well before the current administration, though the past year has seen a new level of growth in government spending. I’ll sit the fence and look forward to your comments and emails.

We’ve heard Dems’ claims that the 16% of our GPD spent on health care is terribly inefficient, so substantial policy is warranted to streamline this important aspect of our economy, especially with the baby boomers reaching retirement.

Many are making similar arguments about energy. For example, approximately two-thirds of electrical energy is lost before it ever reaches homes and businesses. Government expenditures to decrease that waste, it is argued, are prudent investments that will save money in the long run. Conservatives counter that this is a problem best solved by one of our most efficient and effective tools: The free market. The enormous regulation and government involvement strangling utilities preclude a shrewd solution.

I see the validity in each argument, tending at my ideological roots towards the libertarian urge to get government out of as much as possible, but also understanding that a more long-term vision may be needed to encourage necessary change. Highways, telephones, and even the internet are examples of highly convenient aspects of our economy that would not exist were it not for considerable help from the state. Still, each of those sectors grew from substantial demand that made market distortions functional and largely disposable in the end. The auto industry, and to a lesser extent aviation, are examples that one might say have been less successful at making the move from fledglings to the free market.

Clearly there is not a monolithic answer: Government all good or all bad. There are times, such as education and health care, when there is a need for support from the state. Though even then there is a spectrum of ways the government can be involved, ranging from total control to very light intervention that mimics the market. And different approaches are warranted for different sectors. Okay, that’s enough back and forth.

Let me know what you think.

The size and power of the state is growing, and discontent is on the rise

Jan 21st 2010
From The Economist print edition

IN THE aftermath of the Senate election in Massachusetts, the focus of attention is inevitably on what it means for Barack Obama. The impact on the Democratic president of the loss of the late Ted Kennedy’s seat to the Republicans will, no doubt, be significant (see article). Yet the result could be remembered as a message more profound than the disparate mutterings of a grumpy electorate that has lost faith in its leader—as a growl of hostility to the rising power of the state.

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There are good reasons, as well as bad ones, why the state is growing; but the trend must be reversed.

Read the entire article here.

Written by Jason

January 26th, 2010 at 9:14 am

California’s agricultural heartland threatens to become a wasteland

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Agriculture has been fascinating to me for so many reasons. This article captures the intersections between economics and resource issues, history and culture. And since everyone eats and jobs are at the foundation of the recovery we need, stories like this speak to many essential issues at once.

The Appalachia of the West

Jan 21st 2010 | FIELDS BETWEEN BAKERSFIELD AND VISALIA
From The Economist print edition

MIKE CHRISMAN looks out from his SUV as he drives through seemingly endless rows of walnut trees on his property near Visalia, in central California. “I have to be optimistic, I’m so tied to this land,” he says. His great-grandfather, after trying his luck in the Gold Rush, settled in Visalia in the 1850s, and the family has been there ever since. But as California’s secretary for natural resources—a job at the intersection of the environmental and farming lobbies, perennially at loggerheads over the state’s scarcest resource, water—Mr Chrisman also knows that optimism has become a minority view.

Read the entire article here.

Written by Jason

January 25th, 2010 at 5:27 am

Barack Obama’s first year: Reality bites

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I certainly don’t agree with the glowing reviews of Obama’s first year discussed in this article, nor with the condemnation that he is ruining our country, but it is encouraging to think that people beyond our borders are thinking more positively about us than they have in recent years. My experience in Brazil agrees with this assessment, having lived there from 2002-2006, and now returning to work for weeks at a time each year. Brazilians and others throughout the Americas have always received me with open arms, but they have clearly been much more encouraged by respectful rhetoric of inclusion and dialogue than they ever were by Manichean ultimatums that ‘you’re either with us or you’re against us.’

This is not simply a matter of good feelings, making friends, or just wanting people to like us. In an increasingly interconnected world we depend on the people and lands outside the U.S. for raw materials, manufacturing, labor, markets for the goods we produce here, and, of course, for our security. The recent issues of health care, cap and trade, and an ever-expanding deficit have me perplexed at best, and often out right infuriated.  But in terms of the way that we are seen by people in other countries, it matters, and in that respect there have been significant improvements in the last year.

Jan 14th 2010 | WASHINGTON, DC
From The Economist print edition

Governing is harder than campaigning. But America’s 44th president has made an adequate start

AP

FOR some, the magic is undimmed. Carl Baloney is extravagantly happy that Barack Obama is his president. He is old enough to remember segregation: back in the 1960s, his local university turned him away because he was black, he says. He is also old enough to have high blood pressure, which pushes his monthly health-insurance premiums skywards.

[…]

Others feel differently. “I’m neither a Democrat nor a Republican, neither a jackass nor an elephant. But I wouldn’t vote for a socialist. Hell, I’d vote for Adolf Hitler before I’d vote for Barack Obama. At least you know what he’d do to you,” says Ron King, a retired policeman in Stuart, Virginia. He adds that Mr Obama “lies all the time” and is “dangerous; he’s trying to change the entire country.” Mr King has perhaps not rigorously thought through his Hitler analogy, but his anger is real.

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How much does this matter? Simon Anholt, an analyst, heroically estimates the value of the “Obama effect” on America’s global brand at $2.1 trillion. […] Under Mr Obama, he finds, America is once again the most admired country in the world (having slipped to seventh place in 2008). Using the same tools that consultants use to value brands such as Coca-Cola or Sony, he guesses that the value of “Brand America” has risen from $9.7 trillion to $11.8 trillion.

Read the entire article here.

Written by Jason

January 14th, 2010 at 4:11 pm

The IEA puts a date on peak oil production

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Of course there’s more oil out there than what we’ve already found, but it’s hard to believe that any of what’s left to be found can be extracted safely in ways that will be cost effective without increasing the price of petroleum. We’re talking about price increases that will make 2008’s $140 per barrel look thrifty.

Brazilian oil enthusiasts think they’ve just found Saudi Arabia off the coast of Rio. That may be true, but that oil is miles below the ocean’s surface, protected by several thousand feet of rock-hard salt. It will be neither easy nor cheap to get that petroleum from where it currently sits into our gas tanks.

As this report explains, we best learn to use a lot less energy, and also find some viable replacements for petroleum, or my nephews and nieces will have far fewer transportation and energy options available to them than we have available to us today. Continuing with business as usual, against which the article below warns, is simply selfish.

The peak-oil debate

Dec 10th 2009
From The Economist print edition

FATIH BIROL, the chief economist of the International Energy Agency (IEA), believes that if no big new discoveries are made, “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.” Coming from the band of geologists and former oil-industry hands who believe that the world is facing an imminent shortage of oil, this would be unremarkable.…

Read the entire article here.